Importance of Portfolio Management as Retirement Approaches

1. Take Inventory of Your Assets to Organize Your Portfolio

  1. How do you strategically withdraw from accounts, and at what time? For example, you have time be careful with timing for fee and tax purposes.
  2. How should you make your portfolio more conservative as you approach retirement?
  3. When should you and your spouse retire to maximize your return of retirement investments, like Social Security and 401k?

2. Reassess Your Risk

  1. Minimize you inflation risk, or the possibility that the change in prices will outgrow your purchasing power.
  2. Time withdrawals so that you’re not losing potential ability to grow investments to provide income for life.
  3. Time withdrawals to minimize taxes.
  4. Diversify your portfolio enough to protect your retirement income from losses or market swings.

3. Strategize Your Asset Allocation

  1. Income-producing investments such as stocks that pay dividends, bank products like CDs and bonds are important in retirement because once you stop working you typically need this money to live on.
  2. Growth investments, such as growth mutual funds and individual stocks that are expected to grow at a faster rate than their peers or overall market, but come with greater price fluctuations.

4. Gain Income from Selling Your Investments

  1. It’s important to plan ahead if you’ll be selling equities to provide current income.
  2. Tax penalties for any sale.

5. Make Your Principal Last

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Senior Finance Advisor

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